Cash is the fuel that powers your business. Does your business have enough capital in your company and successful funding solutions to support your short, medium and longer-term goals?
Borrowing cash needn’t be looked at as debt, but structured correctly, the mindset should be as an investment. Many businesses need extra cash to support their business journey scaling up, growth, and possibly adding to the value of the business when the sale is planned.
Business finance can come in many forms. Good banks are an excellent place to start, although there are far more choices these days compared with only a few years back, so if you’re used to looking in just one place, broaden the research. There are many specialist avenues to explore, from dedicated asset finance, where new equipment is involved, to invoice financing where quickly raising cash from your outstanding invoices is involved. Each has a place and due consideration should be given to each. Even within each specialist area there are multiple choices, rates, terms etc. Shop around, and don’t necessarily give up if there’s a refusal at the first hurdle, many successful businesses have been funded after multiple attempts. There are also some Government backed loans or grants available, sometimes area or industry specific, so investigate there too!
Understanding the reasoning and outcomes of different funding solutions is a key to ensuring long-term success. Or sometimes failure. Research and early support could determine the way your business goes.
Let’s examine the main reasons for funding solutions:
Boosts your working capital. So really allowing for the business to have enough cash to enable it to function on a day-to-day basis, stabilise and expand if desired. This can be also used to fund taking on new work, projects and customers, so that initial expenditure is covered while waiting for income to materialise from these sources.
Provides investment in your growth strategy. Scaling up, expanding? Extra funding gives you the capital to invest wisely in the new technology, people and scale up the existing capacity of the business.
Strengthens your company’s balance sheet. Why is this important? A balance sheet is a statement of the financial position of your company at a point in time. A snapshot. An instant summary. It’s how you and others see the financial viability of your company and is structured in a very specific way with defined details. Part of this is cash reserves, and sensible funding solutions can enhance the view of the business. Read more about Balance Sheets, tips and their impact on your business in our PDF.
Makes your company more valuable. Cash in the bank is capital for you to use. It is also adding to the value of the business as seen by interested outside parties. Investors and lenders always like to see cash.
Ensure your business is correctly financed. It’s easy to go down the wrong path with insufficient or inappropriate funding solutions and the consequences may only be seen at a later date. Critical funding or sort term loans can seem like a good deal today, but what’s tomorrow’s outcome? We’ll help you assess the need for optional finance, support any applications with the correct advice and planning and explain the ‘why’ and ‘how’ so that you’re in charge of your company’s destiny. An educated decision will keep you in control.
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